COMMISSIONER OF INCOME TAX vs. M/S NOBLE MERCANTILE PVT. LTD.

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ITA/414/2015HC DelhiDLHC01240769201503 January 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the Revenue. The primary reasoning was based on the CBDT Circular No. 21/2015, which stipulated monetary limits for preferring appeals. The Court observed that the tax effect in these appeals was below the prescribed limit of ₹20,00,000 and that, prima facie, none of the cases fell within any exceptions mentioned in the circular. Clause 10 of the circular mandated that pending appeals below the specified tax limits could be withdrawn or not pressed, and this instruction applied retrospectively. The Court clarified that if, for any reason, any of these appeals fell within an exception, the Revenue could seek restoration of the concerned appeals through an appropriate application. The operative direction was the dismissal of the appeals, subject to this clarification.

What were the facts?

These appeals by the Revenue concern seven assessment years within a block period. The Income Tax Appellate Tribunal (ITAT) had passed a composite order allowing the assessees' appeals. The present appeals before the High Court are related to the ITAT's decision. The Central Board of Direct Taxes (CBDT) issued Circular No. 21/2015 on December 10, 2015, which specified monetary limits for preferring appeals. Clause 10 of this circular stated that pending appeals below the specified tax limits could be withdrawn or not pressed, and this instruction applied retrospectively to pending appeals. The High Court noted that the tax effect in these appeals was below the prescribed limit of ₹20,00,000, and superficially, none appeared to fall within any exceptions.

What were the issues?

1. Whether the Revenue is bound by the CBDT Circular No. 21/2015 regarding monetary limits for appeals, and if so, whether the pending appeals below the specified tax limit should be withdrawn or not pressed? Assessee's Contention: The judgment does not record any specific arguments made by the assessees. However, the context implies their reliance on the ITAT's favorable order and potentially the CBDT circular. Revenue's Contention: The Revenue had filed these appeals before the High Court. The judgment implies they were seeking to pursue these appeals despite the tax effect being below the monetary limit stipulated in the CBDT circular.

AI-generated summary — verify with the full judgment below

$-42, 43, 44, 46, 47, 49 & 50 % 03.01.2017 Present: Mr. Raghvendra Singh, Standing Counsel for Appellants in Item Nos. Nos. 42, 43, 44, 46, 47, 49 & 50, Ms.Roopali Gupta for Mr. Prakash Kumar, Advocate for Respondents in Item Nos. 42, 43, 44, 46, 47, 49 & 50. + ITA Nos.405. 411. 414. 523. 527. 717 8c 726 of 2015 (common order)' This Court had framed a question of law for consideration in these appeals. Given its pendency vide Circular No. 21/2015 dated 10.12.2015, the Central Board of Direct Taxes (CBDT) spelt out the monetary limits beyond which appeals could be preferred before the Income Tax Appellate Tribunal (ITAT), High Courts and SLP before the Supreme Court respectively. Clause 10 of the Circular reads as below:- "10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such , appeal was filed. " These appeals concern seven assessment years reflecting a block period. The ITAT had passed a composite order in all these matters. Furthermore, the ITAT had allowed the assessees's appeal. This Court notices that the tax effect in these appeals is below the prescribed limited of ?20,00,000/-; furtheimore, superficially, none of the case falls within the exception. In any event, it is clarified, if for some reason, these appeals or any of them falls within the exception spelt out in the Circular, it is open to Digitally Signed By:AMULYA Signature Not Verified

the Revenue to seek restoration of the concerned appeals by an appropriate application. The appeals are dismissed but in the above terms. S. RAVINDRA BHAT, J. NAJMIWAZIRI, J. JANUARY 03, 2017 sb

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